The 13 Worst States For Starting A Business

Since the economic recession began in 2007, major budget changes have taken place at the state and national level. In many cases this resulted in increased taxes in many states, damaging to success of small businesses.

The Small Business and Entrepreneurship Council recently release its Small Business Survival Index for 2010. The index ranks the climate for small businesses in the 50 states (and D.C.) based on public policy factors that include 38 major government-related, or imposed costs.

The ranking includes issues that strongly impact small businesses such as taxes, regulatory taxes, government spending, health care, and energy costs.

#5 Vermont

Note: the averages for the United States for each category respectively are: 5.31%, 6.50%, 3.22%, and $0.97.

#4 California

Governor Jerry Brown

Personal income tax: 10.55%

Corporate income tax: 8.84%

Property tax: 3.29%

Workers' comp. cost per $100 of wages: $1.21

Note: the averages for the United States for each category respectively are: 5.31%, 6.50%, 3.22%, and $0.97.

#3 New York

AP

Governor David Patterson

Personal income tax: 8.97%

Corporate income tax: 8.307%

Property tax: 4.11%

Workers' comp. cost per $100 of wages: $0.69

Note: the averages for the United States for each category respectively are: 5.31%, 6.50%, 3.22%, and $0.97.

#2 New Jersey

Personal income tax: 8.97%

Corporate income tax: 9.0%

Property tax: 5.09%

Workers' comp. cost per $100 of wages: $0.90

Note: the averages for the United States for each category respectively are: 5.31%, 6.50%, 3.22%, and $0.97.

#1 District of Columbia

Mayor Adrian Fenty

Personal income tax: 8.5%

Corporate income tax: 9.975%

Property tax: 4.42%

Workers' comp. cost per $100 of wages: $0.23

Note: the averages for the United States for each category respectively are: 5.31%, 6.50%, 3.22%, and $0.97.

*Please note that the District of Columbia was not included in the studies on the state tort costs, eminent domain legislation and highway cost efficiency, so D.C.’s last place score actually should be even worse.